Iowa’s Cattle Feeding Comparative Advantage at High Energy Prices

John Lawrence, Extension Livestock Economist and Director, Iowa Beef Center

Situation:

Oil prices have increased four-fold in five years.  These higher prices have supported the growing ethanol industry that has contributed to higher corn prices, but has also led to changes Iowa’s comparative advantage in cattle feeding relative to  grain deficient regions.  While greater access to wet distiller’s grains and solubles has been widely touted as an opportunity for Iowa feedlots, they are only part of the story. Specifically, transportation costs to move corn for cattle feeding in corn deficient regions has increased 50-120% and commercial fertilizer prices have increased 150% in five years.  As a result, Iowa advantage over regions that import corn and have excess nutrients has improved dramatically.  However, many Iowa cattle feeders’ have not recognized nor captured the new opportunities.

Objective:

Have Iowa cattle feeders and their lenders understand and act upon the fundamental change in the economic environment caused by higher energy prices.

Activities/Output:      Written materials, presentations, decision tools

Written materials:      Column in Iowa Cattlemens Magazine

Articles on value of manure

Presentations:  Numerous presentations on subject to producers and lenders in Iowa and to regional and national groups.

Numerous presentations on value of manure.

Decision tools: Checklist of feedlot expansion

Curriculum: Awareness presentation, assessment tool, action plan on capturing manure value.

Trained field specialists on developing and using quality management system template of assessment tool and action plan to implement changes at the farm.

Impact/Outcomes:        Several Iowa cattle feeders expanding their operation.  Many more are beginning to take nutrient credit for manure that then didn’t do before. 

2008

140 Iowa Beef Center

Page last updated: August 25, 2008
Page maintained by Linda Schultz, lschultz@iastate.edu